Part IA: (10 Marks) (Questions: 1-5, Each Question carry 2 Marks) Questions: Cho

Question

Part IA: (10 Marks) (Questions: 1-5, Each Question carry 2 Marks) Questions: Choose the Best option 1.Which of the following best describes the cost that has already been incurred and that cannot be changed by any decision made now or in the future? A. Differential cost B. Opportunity cost C. Salvage cost D. Sunk cost 2. Which of the following best describes the amount by which an asset's value decreases until reaches its salvage value? A. Depreciation B. Appreciation C. Approximation D. Estimation 3. Direct material cost related to your Apple computer would be the cost for the A. Unskilled labor B. Supervisor salary C. Electricity usage D. Intel memory chip 4. Indirect labor cost for a manufactured automobile would include A. B. C. D. Salary of the CEO of the company Salary of workers who fit the tyres Salary of workers who paint finished cars Salary of workers who fit the engine 5. In the bottom up approach to cost estimating, the: A. Required price is an input variable. B. Required price is an output variable C. Cost estimates are an output variable D. None of the options

Explanation / Answer

(1) (D)

Sunk cost has already been incurred, and cannot be recovered on basis of any future decision.

(2) (A)

Depreciation is a non-cash expense that allocates an asset's cost over its useful life.

(3) (D)

An input cost will be direct material cost.

(4) (C)

(5) (D)

Cost estimates are input variables.

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